EXECUTIVE BRANCH LOBBYING; GIFTS
APPLICATION OF EXECUTIVE BRANCH LOBBYIST REGISTRATION ACT
TO VARIOUS GOVERNMENTAL ENTITIES
AND
GIFTS FROM MULTIPLE DONORS
To: Warren Husband, Esquire (Tallahassee)
SUMMARY:
None of the governmental entities listed in the inquiry are Executive Branch agencies for purposes of Section 112.3215, Florida Statutes. Specifically, counties, including charter or non-charter counties; municipalities; school districts; water management districts; regional planning councils; community college districts, community college boards of trustees, and an individual community college; special districts created pursuant to Chapter 189, Florida Statutes (either dependent or independent); community development districts described in Chapter 190, Florida Statutes; legal or administrative entities created by interlocal agreement pursuant to Section 163.01(7), Florida Statutes, under various scenarios; the Florida Ports Financing Commission created by interlocal agreement under Section 163.01(7)(d), Florida Statutes; the Florida Seaport Transportation and Economic Development Council described in Section 311.09, Florida Statutes; expressway authorities described in Part I of Chapter 348, Florida Statutes; the Orlando-Orange County Expressway Authority described in Part V, Chapter 348, Florida Statutes; regional water supply authorities as described in Section 373.1962, Florida Statutes; regional transportation authorities as described in Part V of Chapter 163, Florida Statutes; and the Florida Housing Finance Corporation, as described in Part V of Chapter 420, Florida Statutes, are not Executive Branch agencies for purposes of Section112.3215, Florida Statutes.
Expenditures made to persons who are not "agency officials" or "agency employees" for purposes of Section 112.3215, Florida Statutes, are not prohibited per se, but "indirect expenditures" are prohibited.
Expenditures made by a lobbyist or principal to "agency officials" or "agency employees" at any Executive Branch agency are prohibited, even if the lobbyist or principal only lobbies another Executive Branch agency.
QUESTION 1:
Are the following governmental entities Executive Branch agencies for purposes of Section 112.3215, Florida Statutes?
Question 1 is answered in the negative for all of the identified governmental entities. None of the governmental entities named in your inquiry are considered part of the Executive Branch of state government for purposes of Section 112.3215, Florida Statutes.
In your letter of inquiry, you relate that you seek this opinion on behalf of your client, the Securities Industry and Financial Markets Association (the Association). The Association represents more than 650 member firms of all sizes in financial markets in the U.S. and around the world, and acknowledges that it is the "principal" of a "lobbyist" as those terms are defined in Section 112.3215, Florida Statutes. The Association is in doubt about the application of Section 112.3215, Florida Statutes, with respect to specific types of governmental entities in Florida, and seeks our guidance on whether the listed entities are considered to be Executive Branch agencies for purposes of the registration and reporting scheme outlined in Section 112.3215, Florida Statutes. Specifically, you have asked whether the following entities would be considered to be Executive Branch "agencies":
Section 112.3215(1)(a) defines the term "agency" to mean
the Governor, Governor and Cabinet, or any department, division, bureau, board, commission, or authority of the Executive Branch. In addition, "agency" shall mean the Constitution Revision Commission as provided by s. 2, Art. XI of the State Constitution.
Up until now, we have rendered only one opinion that examined whether a governmental entity was an Executive Branch agency for purposes of Section 112.3215, Florida Statutes. In CEO 94-7, we concluded that the Tri-County Commuter Rail Authority was not an Executive Branch agency after examining various constitutional and statutory provisions, and also after considering whether the goal of registration and reporting would be achieved there, since registration and reporting were handled in Tallahassee, not in the locale where the Authority operated. These same considerations are still pertinent.
The basic structure, duties, function, and operations of State government are defined and established by the Florida Constitution, which establishes the basic law of the State and guarantees various rights and freedoms of the people. Article II, Section 3, Florida Constitution, provides:
The powers of the state government shall be divided into legislative, executive and judicial branches. No person belonging to one branch shall exercise any powers appertaining to either of the other branches unless expressly provided herein.
The structure of the Executive Branch is more fully developed in Article IV, which provides in Article IV, Section 6, Florida Constitution:
Executive departments.--All functions of the Executive Branch of state government shall be allotted among not more than twenty-five departments, exclusive of those specifically provided for or authorized in this constitution. The administration of each department, unless otherwise provided in this constitution, shall be placed by law under the direct supervision of the governor, the lieutenant governor, the governor and cabinet, a cabinet member, or an officer or board appointed by and serving at the pleasure of the governor, except:
(a) When provided by law, confirmation by the senate or the approval of three members of the cabinet shall be required for appointment to or removal from any designated statutory office.
(b) Boards authorized to grant and revoke licenses to engage in regulated occupations shall be assigned to appropriate departments and their members appointed for fixed terms, subject to removal only for cause.
Thus, Article IV, Section 6, Florida Constitution, provides a key aspect for determining whether a governmental entity is an "Executive Branch" agency: it depends on who directly supervises the agency's administration. In Jones v. Chiles, 638 So.2d 48 (Fla. 1994), the Florida Supreme Court ruled that inherent in the Governor's supervisory authority over all executive departments is the power to appoint executive officers to public office. In reaching this conclusion, the court held:
As the chief executive officer in whom the supreme executive power is vested, the Governor has direct supervision over all executive departments unless the legislature places that supervision in the hands of one of the following other executive officers: the lieutenant governor, the governor and cabinet, a cabinet member, or an officer or board appointed by and serving at the pleasure of the governor. See art. IV, SS 1(a), 6, Fla. Const. Inherent in that direct supervisory authority is the power to appoint executive officers to public office. Id., at p. 50.[E.S.]
Other considerations include its location in the Executive Branch structure and whether it is integrated into one of the Executive departments outlined in the Florida Constitution and Chapter 20, Florida Statutes, and whether its operations and concerns are statewide in nature.
Turning now to the governmental entities listed in your inquiry, we do not consider any of them to be Executive Branch agencies for purposes of Section 112.3215, Florida Statutes. Counties (both charter and non-charter) are political subdivisions under the direct supervision of an elected board of county commissioners. See Art. VIII, Section 1 or 6, Florida Constitution, and Chapters 124 and 125, Florida Statutes. Thus, their officers are not appointed by the governor, they do not fit within any of the executive departments, and their operations are not statewide. The same can be said for municipalities, which are created by general or special law and governed by elected public officers. Art. VIII, Section 2 or 6, Florida Constitution, and Chapters 165 and 166, Florida Statutes. Nor is a school district an Executive Branch agency. Each county constitutes a school district and an elected school board operates, controls, and supervises all of the free schools within the district. Art. IX, Section 4, Florida Constitution, and Section 1001.34, Florida Statutes. The State's five water management districts are not Executive Branch agencies. Although their governing boards are appointed by the Governor and subject to confirmation by the Senate and the Governor approves their budget, they are not supervised by an Executive department and their areas of operation are regional. Sections 373.073 and 373.536, Florida Statutes, and CEO 91-54. The eleven regional planning councils operating in Florida are authorized by Section 186.504, Florida Statutes. Their membership includes representatives from the member counties within their geographic boundaries, representatives from other agencies operating in the region, and representatives appointed by the Governor. Consequently, they are not under the direct supervision of the Governor and are not "Executive Branch" agencies.
Community college districts, community college boards of trustees, and community colleges themselves are also not Executive Branch agencies. Although members of community college boards of trustees are appointed by the Governor and confirmed by the Senate, community colleges are creatures of statutes and operate either within a single school district, or two or more school districts. Therefore, they are not "Executive Branch" agencies. Chapter 1001, Part III, et seq., Florida Statutes. Special districts - dependent or independent - are authorized by Chapter 189, Florida Statutes, as local units of special purpose within a limited boundary. The Governor is not responsible for appointing all members of their governing boards, as in some cases they are elected and in some cases they are appointed, but in no case does the Governor appoint all of a district's members. Accordingly, they would not be considered Executive Branch agencies. Community development districts authorized by Chapter 190, Florida Statutes, are also local units of special purpose government. Their boards of supervisors are initially listed in the petition for the establishment of the district, and subsequently, supervisors are elected. As such, they would not be considered Executive Branch agencies. Separate legal entities or administrative entities created by interlocal agreement pursuant to Section 163.01(7), Florida Statutes, are not Executive Branch agencies. The statute which authorizes their creation does not contemplate them being comprised of only Executive Branch agencies. Instead, it is clear that counties and municipalities are primarily the entities that come together to adopt an interlocal agreement. Moreover, since county and municipal officers are elected, not appointed by the governor, an entity created by interlocal agreement would not constitute an Executive Branch agency even if only a single county or municipality were a member and it was dominated by Executive Branch agency members.
With regard to the Florida Ports Financing Commission, it was established by interlocal agreement pursuant to Chapter 163, Florida Statutes, as a means of financing various capital projects for Florida ports by issuing bonds and transferring the proceeds to the individual ports. See AGO 2000-32. The port directors for Florida's fourteen publicly-owned ports (or their designees) serve as members of the Commission. As a result, the Commission cannot be said to be under the direct supervision of the governor. Similarly, the Florida Seaport Transportation and Economic Development Council was created pursuant to Chapter 311, Florida Statutes, to finance port transportation projects. It consists of the port directors (or their designees) for the State's fourteen publicly-owned ports, and representatives of the Department of Transportation, the Department of Community Affairs, and the Governor's Office of Tourism, Trade, and Economic Development. Ten of the fourteen seaports have directly-elected officials, and the remaining four are headed by bodies who are appointed by local bodies, by the Governor, or by some combination thereof. Notwithstanding that it is housed in the Department of Transportation, it is clear that the Council does not fall under the direct supervision of the Governor or an executive department.
Expressway and bridge authorities described in Chapter 348, Florida Statutes, and regional transportation or transit authorities authorized by Chapter 343, Florida Statutes, are also not Executive Branch agencies. They are not subject to the direct supervision of the Governor, either through the appointment process or otherwise, and their areas of concern are local or regional in nature. Regional water supply authorities described in Section 373.1962, Florida Statutes, are authorized to be created by interlocal agreements between counties, municipalities, or special districts pursuant to Section 163.01, Florida Statutes. They are not Executive Branch agencies as they are not under the direct supervision of the Governor or other executive department, and their area of concern is not state-wide.
Finally, with regard to the Florida Housing Finance Corporation as described in Part V of Chapter 420, Florida Statutes, we do not consider it to be an Executive Branch agency. In 1997, the Florida Legislature abolished the Florida Housing Finance Agency and recreated it as the Florida Housing Finance Corporation. See Section 7 of Chapter 97-197, Laws of Florida. Section 420.504(1), Florida Statutes, expressly states that the Corporation is "not a department of the Executive Branch of state government within the scope and meaning of s. 6, Art. IV of the State Constitution, but is functionally related to the Department of Community Affairs in which it is placed." Although in many ways the Corporation still functions as a governmental entity, by the express statutory language of Section 420.504(1), Florida Statutes, it clearly is not. Moreover, even though we opined in CEO 01-3 that a legislator would violate Article II, Section 8, Florida Constitution, and Section 112.313(9), Florida Statutes, if he were to represent clients for compensation before the Corporation, that opinion was based on the language in Section 420.5061, Florida Statutes, which states that "for purposes of Section 112.313, Florida Statutes, the Corporation is deemed to be a continuation of the Agency." Given the strict judicial construction applicable to penal statutes such as those provisions within the Code of Ethics [see City of Miami Beach v. Galbut, 626 So. 2d 192 (Fla. 1993)], we conclude that the Florida Housing Finance Corporation is not an Executive Branch agency for purposes of Section 112.3215, Florida Statutes.
Accordingly, we find that none of the entities in your inquiry are considered to be Executive Branch agencies for purposes of Section 112.3215, Florida Statutes.
QUESTION 2:
Would Section 112.3215(6)(a), Florida Statutes, be violated if a lobbyist or principal made an "expenditure" to someone other than an "agency official or employee?"
Question 2 is answered as follows.
Your second question asks whether Section 112.3215(6)(a), Florida Statutes, would be violated if an expenditure were made to an employee of an Executive Branch agency who is not required to file financial disclosure. The operative statutory provisions are as follows:
Section 112.3215(6)(a), Florida Statutes, provides:
Notwithstanding s. 112.3148, s. 112.3149, or any other provision of law to the contrary, no lobbyist or principal shall make, directly or indirectly, and no agency official, member, or employee shall knowingly accept, directly or indirectly, any expenditure.
Section 112.3215(1)(b), Florida Statutes, defines "agency official" or "employee" to mean:
any individual who is required by law to file full or limited public disclosure of his or her financial interests.
Section 112.3215(1)(d), Florida Statutes, defines "expenditure" to mean
a payment, distribution, loan, advance, reimbursement, deposit, or anything of value made by a lobbyist or principal for the purpose of lobbying. The term "expenditure" does not include contributions or expenditures reported pursuant to chapter 106 or federal election law, campaign-related personal services provided without compensation by individuals volunteering their time, any other contribution or expenditure made by or to a political party, or any other contribution or expenditure made by an organization that is exempt from taxation under 26 U.S.C. s. 527 or s. 501(c)(4).
In CEO 07-8, we opined that the expenditure prohibition in Section 112.3215(6)(a), Florida Statutes, did not expressly prohibit a non-lobbyist from making expenditures. However, we noted that the factors listed in Rule 34-12.190(3), Florida Administrative Code, would first have to be weighed in order to determine whether they were prohibited indirect expenditures. The same analysis is applicable here: expenditures made to persons who are not "reporting individuals" are not prohibited per se, but "indirect expenditures" are prohibited. See Rule 34-12.190, Florida Administrative Code, and CEO 08-2, CEO 07-8, CEO 07-3, CEO 06-15, CEO 06-14, CEO 06-11, CEO 06-7, and CEO 06-4 on "indirect expenditures."
Accordingly, in the absence of any facts, we find that as long as the lobbyist or principal does not make, directly or indirectly, an expenditure that is knowingly accepted by an "agency official" or "agency employee," Section 112.3215(6)(a), Florida Statutes, would not be violated if a lobbyist or principal were to make an expenditure to an employee who does not file financial disclosure.
QUESTION 3:
Would Section 112.3215(6)(a), Florida Statutes, be violated if a principal retains a lobbyist to only lobby the Department of Management Services, but an expenditure is made to an "agency official" or "agency employee" of the Department of Environmental Protection?
Question 3 is answered in the affirmative.
In your letter of inquiry, you explain that your client retains a lobbyist to lobby the Department of Management Services, but it does not retain a lobbyist to lobby the Department of Environmental Protection. You ask whether expenditures could be made to "agency officials" and "agency employees" of the Department of Environmental Protection without violating Section 112.3215(6)(a), Florida Statutes.
This is our first opportunity to address the issue and, based upon the language in Section 112.3215(6)(a), Florida Statutes, it is our view that expenditures to "agency officials" or "agency employees" of any Executive Branch agency would violate the prohibition. As previously noted, Section 112.3215(6)(a), Florida Statutes, provides:
Notwithstanding s. 112.3148, s. 112.3149, or any other provision of law to the contrary, no lobbyist or principal shall make, directly or indirectly, and no agency official, member, or employee shall knowingly accept, directly or indirectly, any expenditure.
The words used in this statute are unequivocal: "no lobbyist or principal shall make" and "no agency official, member, or employee shall knowingly accept." Neither this provision nor the definitions in Section 112.3215(1), Florida Statutes, limit the restriction to a particular agency or agencies (unlike the definitions provided in Section 112.3148, Florida Statutes.) In our view, the only issue is whether the agency is an Executive Branch agency. If it is, expenditures should not be made by an Executive Branch lobbyist, even if the lobbyist is not seeking to influence the recipient's agency in the area of policy or procurement.
There is also a practical reason for applying the expenditure prohibition as an across-the-board ban that extends to all Executive Branch agencies: the lobbyist registration process. Section 112.3215(3), Florida Statutes, creates a registration process for lobbyists and requires them to disclose information under oath, including the agencies before which the lobbyist will appear. The registration form (CE Form 20) contains the following statement: "If 'Agency Registration' is left blank, the lobbyist is registered to lobby all agencies." The Lobbyist Registration Office advises that the virtually all registered lobbyists1 leave this space blank on their registration forms. By leaving it blank, the lobbyist forgoes the need to later amend his or her registration to lobby additional agencies, even though there would be no cost involved in an amendment of this type. However, the downside to this convenience is that since virtually no lobbyists list individual agencies on their registration forms, an agency official or employee has no way of knowing whether a lobbyist only lobbies a particular agency. The Lobbyist Registration Office publishes2 yearly directories of registered lobbyists (by lobbyist and by principal), and lobbying firms. By making this information available in these formats, an agency official or employee can easily ascertain whether someone is registered as a lobbyist or a principal and govern themselves accordingly.
Accordingly, we find that by acting and registering as an Executive Branch lobbyist, the lobbyist is prohibited from making expenditures to an "agency official" or "agency employee" of every Executive Branch agency.
QUESTION 4:
Whether, and how, would a lobbyist disclose a gift given to a city commissioner where the value of the gift is divided among several donors, some of whom are lobbyists and some of whom are not?
Question 4 is answered as follows.
Your final questions concern the gift acceptance and reporting provisions of Section 112.3148, Florida Statutes, in particular, questions about gifts from multiple donors. Under your first scenario, you describe a situation involving a city commissioner who attends a social event which has a per-person cost of $125. Five donors, each of whom are principals of lobbyists who lobby the city, pay $25 towards his attendance. One of these donors is your client. Since the total value of the gift to the city commissioner is $125, you ask whether your client has given a prohibited gift or one that is reportable.3
Section 112.3148(4), Florida Statutes, prohibits lobbyists or their partners, firms, employers, or principals, from giving a gift with a value in excess of $100 to a reporting individual. Presumably, none of the donors in the situation you describe share a common partner, firm, employer, or principal. Since none of the five lobbyists have given a gift worth in excess of $100, the gift is not prohibited even though its total value exceeds $100. Thus, it may be given by the lobbyists and accepted by the city commissioner. On the reporting obligation of the lobbyists, Rule 34-13.420(9), Florida Administrative Code, provides:
Where a gift is provided by multiple donors, one or more of whom is a person or entity subject to the quarterly disclosure required under this rule, the donor's contribution to the gift must be disclosed if the portion of the gift's value attributable to that donor exceeds $25.
Since none of the lobbyists paid more than $25, none of the lobbyists have to file a CE Form 30 (Donor's Quarterly Gift Disclosure). However, the city commissioner would have a reporting obligation since Section 112.3148(8), Florida Statutes, requires reporting individuals to file a quarterly gift disclosure form (CE Form 9) disclosing their receipt of gifts that have a value in excess of $100. Rule 34-13.400(7), Florida Administrative Code, is instructive. It provides:
Where a gift valued over $100 has been given to a reporting individual or procurement employee by multiple donors, the names and addresses of all persons or entities who contributed to the acquisition of the gift shall be reported, unless unknown.
In addition, Rule 34-13.510(1), Florida Administrative Code, provides:
For purposes of any gift disclosure to be made by a reporting individual or procurement employee, the value of a gift provided by multiple donors is determined by the valuation principles of Section 112.3148(7), F.S, and Rule 34-13.500 applied to the gift as a whole, rather than by any pro rata share.
Based upon these provisions, since the value of the gift was $125, the city commissioner should disclose it on a CE Form 9, and list the names of each person who contributed toward the gift.
You also ask whether our answer would change if two of the five entities splitting the cost of the city commissioner's attendance were not lobbyists who lobbied the city commissioner or the city. Our response would not change. The city commissioner could accept the gift and would have to disclose it on a CE Form 9. See Rule 34-13.510(1), Florida Administrative Code. The donors who are lobbyists who lobby the city would not have to file a CE Form 30 because the portion of the gift attributable to them was not valued at more than $25.
Your question is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on September 5, 2008 and RENDERED this 10th day of September, 2008.
____________________________________
Cheryl Forchilli, Chair